General Motors (NYSE:) announced today that it will build full-size sport utility vehicles with flexible fuel capability.

Beginning in the 2002 model year, all Chevrolet Suburbans and Tahoes and GMC Yukons and Yukon XL’s equipped with the Vortec 5.3 liter V8 can run on varying blends of ethanol and gasoline — from 100 percent gasoline up to a maximum 85 percent ethanol (E85). The all-new Chevrolet Avalanche “ultimate utility vehicle” with the standard 5.3 liter V8 will also have E85 capability beginning in the 2003 model year.

The full-size sport utilities will join the Chevy S-10 and GMC Sonoma small pickups with the E85-compatible 2.2 liter four-cylinder engine that went into production in late 1999. By the end of the 2004 model year, GM will have produced over one million trucks with flex-fuel capability.

GM made the announcement at the finals of Future Truck 2000; an advanced vehicle competition which was held this week at its proving ground in Mesa, Ariz. Co-sponsored by GM, The US Department of Energy and Yahoo! Inc., Future Truck 2000 is a competition in which hundreds of engineering students from some of North America’s best universities re-engineer Chevrolet Suburban sport utility vehicles with alternative fuel and propulsion systems to maximize fuel efficiency and minimize the impact of greenhouse gases without compromising performance or safety.

“GM recognizes that the sustainability of our business is dependent on the sustainability of our environment, and we act on that belief,” said Thomas G. Stephens, GM vice president and group director of engineering, GM Truck Group. “E85 is a viable alternative to gasoline where it is available. It is a renewable fuel that can be produced from grain or agricultural waste, and that makes it very attractive.”

GM engineers re-designed the trucks’ fuel systems with more robust materials to accommodate ethanol. They also optimized engine systems such as air-fuel ratio control and spark advance for every blend of fuel up to 85 percent ethanol, and added a fuel composition sensor that detects the percentage of ethanol present and relays that information to the vehicle’s powertrain control module.

“The key to the success of GM’s flexible fuel system was to make sure it is transparent to the user,” Stephens said. “Our customers have come to expect the best from GM’s full-size trucks, so we have to assure them that driveability will not be compromised, even in cold weather.”

GM’s flex-fuel trucks offer the same warranty as its gasoline-powered models. The E85 system will be offered to customers at no extra charge.